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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (2269)	12/28/2003 10:20:45 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Inroads in China for Wine Importers By YILU ZHAO Published: December 28, 2003 hanghai ONE night in 1995, Sam Featherston, an American who had just begun selling imported wine in Beijing, delivered 12 bottles of Château Lafite Rothschild worth $200 each to a group of Chinese businessmen at a karaoke bar. They opened the bottles, poured the wine into 12 pitchers, mixed it with Sprite and tossed in watermelon and orange slices. Mr. Featherston cringed. Offered a glass, he turned it down. "I am sure a few die-hard French winemakers would have turned in their graves," he said recently of the experience. Just a few years ago, such tales might have made Western businessmen wonder why the wine importers were in China. Few Chinese, after all, had even heard of the term Bordeaux or chardonnay. Fewer than 60,000 cases of imported wine were sold in 1995 in the country, which has more than a billion people. But the importers who have persevered in China have benefited. Montrose Food and Wine, where Mr. Featherston has worked since 1994, and ASC Fine Wines, another company that has had a presence in China since the mid-1990's, both say they are making healthy profits as the largest players in the country's imported-wine market. The emerging Chinese middle class, which is buying Buicks and ever larger apartments, has also started - gingerly - to drink foreign wines at restaurants and to try to tell the difference between cabernet sauvignons and merlots. ... About two years ago, Western importers started to find a sizable audience ready to learn the minutiae of wine in big cities like Shanghai, Beijing and Guangzhou. The growing size of that audience is linked to rising income in China's urban centers. In 2002, per capita yearly income in Shanghai exceeded $1,600, according to the National Bureau of Statistics of China, and the figures for the other large cities trail closely. But many in the young middle class earn $7,000 to $10,000 a year. ... Lower taxes may also make imported wine more appealing. The tax on imported alcohol has fallen precipitously and will decline further as China gradually fulfills its World Trade Organization obligations. In 1995, a 300 percent tax was levied on imported wine. The tax is now 65 percent and will drop to 40 percent in 2004. At that point, the future of imported wine will depend on an evolution in customs. When Mr. Featherston's account of watching fine Bordeaux being ruined by Sprite was relayed to Chinese wine buyers, many thought that it was nothing out of the ordinary. "Well, the Westerners put milk and sugar into the finest green tea," said Haifeng Cao, a Beijing woman who has tried some varieties of wine. "Isn't that the same thing?" nytimes.com